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Kelowna $63.3 million MF sale shows strength of second-tier cities

Canada’s largest landlord paid $327,000 per door for brand new, four-building rental complex in West Kelowna
3623 Elliot Kelowna copy2
New four-building rental complex was bought by Canadian Apartment Properties REIT |Avison Young

The sale of a new purpose-built rental apartment complex this November shows the growing strength of the multi-family market in B.C.’s outlying areas, according to Robert Greer of Avison Young, Vancouver, who was among the Avison Young team that brokered the $63.3 million sale.

The four-building, 193-unit Lakeview Point project  at 3623 Elliot Road, West Kelowna, by Ironclad Developments, was purchased by Toronto-based Canadian Apartment Property Real Estate Investment Trust, Canada’s largest landlord. The net rentable area is 141,81 square feet.

The deal worked out to $327,000 per door, according to Greer, which he said is a much lower price than investors would find in Greater Vancouver for a brand new project. The capitalization rate, he noted, was 5 per cent.  This, Greer said is higher than in Metro Vancouver, where multi-family yields are often in the 2.5 per cent to 3.5 per cent range.

Greer said institutional buyers are very active in B.C. and, like local investors, are now looking closely at secondary markets for lower prices and higher yields.

He singled out Kelowna, Kamloops and Penticton as hot spots for multi-family investors in the Okanagan market.

Avison Young, he said, recently sold two rental apartment buildings in Kamloops, both to local buyers.

“It used to take months to receive offers and sell a Kamloops multi-family building,” he said.

“Now it is weeks.”

The Avison Young multi-family principal brokers involved in the West Kelowna done deal also included Carey Buntain and Chris Wieser, with associate Bijan Lalji.